Dalmia Bharat - Prices Soft In Key Markets; But Volume Growth Should Be Better: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Despite the significant expansion, Dalmia Bharat Ltd.’s leverage remains low aided by strong volume growth (at ~15% compound annual growth rate over FY14-24E), improvement in profitability (20% Ebitda compound annual growth rate over FY14-24E), and divestment of non-core assets (divested its entire investments in refractory business, retail businesses for all construction and building materials, and partial stake in IEX). Its net debt stood at Rs 4.3 billion, and net debt-to-Ebitda ratio was at 0.16 times as of December 2023. Dalmia Bharat’s net debt-to-Ebitda is estimated to remain below two times, factoring in the expected cash outflow of Rs 33 billion for Jaiprakash Associates’ cement asset acquisition, and Rs 35 billion for organic growth plans in FY25E. The stock currently trades at 11 times/9.5 times enterprise value/Ebitda and enterprise value/tonne of $94/$92 for FY25E/FY26E. We have cut our Ebitda by 4%/8%/8% for FY24E/FY25E/FY26E, given the drop in realisation/tonne. We value the stock at 12 times FY26E (earlier 13 times) EV/ Ebitda to arrive at our revised target price of Rs 2,500 (earlier Rs 2,800). The stock offers an upside potential of 25% from current levels. Reiterate Buy..Click on the attachment to read the full report:.Here Are The Top Stock Picks For April 2024 By Axis Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Dalmia Bharat - Prices Soft In Key Markets; But Volume Growth Should Be Better: Motilal Oswal

Leverage at a comfortable level; reiterate Buy

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